The Tax Factor was created to educate individuals and small-business owners about taxes. Let’s face it, nothing in life is guaranteed except death and taxes. Okay, maybe that sounded pretty depressing but the goal of this blog is to help you find the information to learn how to make taxes work for you. Taxes can be extremely complicated but knowing about deductions and credits can save you thousands of dollars per year.

Aug 9, 2012

Protect Your Neck: IRS may have refunded $5 billion or more to identity thieves

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More depressing news brought to you by the Goodfellas at The IRS

The Internal
Revenue Service may have delivered more than $5 billion in refund checks to
identity thieves who filed fraudulent tax returns for 2011, Treasury
Department investigators said on August 2nd. They estimate another $21 billion could make its way to ID
thieves over the next five years.

The IRS
is detecting far fewer fraudulent tax refund claims than actually occur,
according to a government audit that warned the widespread problem could
undermine public trust in the U.S. tax system.

Although the IRS detected about 940,000 fraudulent returns
for last year claiming $6.5 billion in refunds, there were potentially another
1.5 million undetected cases of thieves seeking refunds after assuming the
identity of a dead person, a child or someone who normally wouldn't file a tax
return.

In one example, investigators found a single address in
Lansing, Mich., that was used to file 2,137 tax returns. The IRS issued more
than $3.3 million in refunds to that address. Three addresses in Florida, the
center of the identity theft crisis, filed more than 500 returns totaling more
than $1 million in refunds for each address.

In another troubling scenario, hundreds of refunds were
deposited into the same bank account — a red flag for investigators searching
for ID thieves who may be filing for refunds for multiple people. In one
instance, the IRS deposited 590 refunds totaling more than $900,000 into one
account.

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About Me

As a federally authorized Enrolled Agent and owner and CEO of the Brooklyn-based J.S. Tax Corporation, Jamaal Solomon provides tax services, business consulting, and IRS problem resolution. Delivering expert service, with his mission to “Take the fear out of taxes” for his clients, Jamaal has prepared federal and multi-state tax returns for individuals, partnerships, not-for-profit organizations, and corporations; has helped numerous tax-exempt organizations with their 501 (c)(3) applications; and has fielded a broad range of client and governmental inquiries on specific returns.
Licensed as an Enrolled Agent since 2007, Jamaal is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the IRS for audits, collections, and appeals. As part of the Enrolled Agent program, Jamaal completes an average of 24 hours of continuing professional education each year. He earned his MS in Taxation from CUNY Baruch in 2009 and a BS in Business Management from SUNY Stony Brook in 2002.